IES to sign MoU with Vestas on developing largest ASEAN wind farm in southern Laos

Thursday 02 June 2016 16:36
Thailand-based leading energy developer Impact Electrons Siam or "IES" has selected Danish-based wind turbine manufacturer Vestas as preferred technology/EPC partner to develop a 600 MW wind project in southern Laos. The project, which can be completed in 2020, is set to become the largest wind farm in ASEAN. The signing ceremony of the Memorandum of Understanding is expected to be held at the Danish Ambassador's residence in Bangkok in June 2016.

Located near the Sekong River and linked to Pak Se, across from Ubon Ratchchathani province, the wind farm is set to be constructed on an area covering the districts of Dak Cheung and Sanxay in Sekong and Attapeu provinces. The project will guarantee a highly stable source of energy at low cost with heavy demand coming from new super infrastructure, telecommunications and industrial projects across the ASEAN Economic Community (AEC). The power generated is expected to be sold on the ASEAN markets, mainly to Thailand and buyers bordering the Mekong. As such, the project will play a key role in the AEC, and Thai-Laos collaboration for sustainable development.

"It will distinguish Laos and Thailand - as countries - as outstanding contributors to fighting Climate Change under the Paris Climate Change Accord, often called "COP 21", agreed last November," said Woramol Khamkanist, a director of IES, which is developing the project.

The Kingdom and Laos are among 177 signatories to limit global temperatures to less than 2 degrees Celsius by reducing carbon emission and employing renewable replacements under COP 21. "The Thai-Laos cooperation will significantly raise our stature in the world by taking firm action with respect to the Paris accord," said Woramol, who added that Southeast Asia has been criticised as being a laggard in curbing Climate Change because of its dependence on fossil-fired plants.

The Lao government, which signed an agreement to develop the project with IES back in August 2015, is set to discuss with Thai energy officials the terms around which the wind farm will provide Thai consumers below average electricity prices and eliminate all government subsidies such as adders. "We believe renewable energy is a sustainable energy when it can compete with conventional fuel without any subsidy." said Woramon. Vestas and IES look forward to developing the wind farm to support the ASEAN and being part of the local community.

Denmark, where Vestas was founded, has been at the forefront of wind energy innovation for over three decades and is widely touted for having successfully created economic growth while reducing CO2 emissions, proving economic and social development can work in harmony with environmental awareness. Vestas APC President Chris Beaufait sees tremendous opportunities for wind power in ASEAN. "Vestas is honored to be selected as the preferred technology provider for this milestone project in the region, which has huge wind energy potential to power sustainable growth. We expect that our partnership with IES will produce significant opportunities and together we will set an example for wind energy," said Beaufait.

"IES looks forward to generating low-cost power using the latest wind technology from Vestas. It will employ their latest models as our exclusive development partners. Under the terms of the MOU, Vestas will provide technical support and a turn-key engineering procurement and construction contract" said Woramol.

Under current terms Thailand is buying electricity under a 7,000 MW purchase agreement. The amount is expected to be raised to more than 10,000 MW in the coming years. Laos is keen to make renewables a key part of its energy sales. "The Lao wind power sale to Thailand will be part of the existing Lao allocation. It will not affect or take any share from Thai wind producers," Woramol said.

The project has strong backers including the Asian Development Bank, IFC, a member of the World Bank Group, Woramol noted. ADB and IFC have indicated their support to provide over US$1-billion financing for the project, he added. Major Thai commercial banks are also ready to join, having worked with Woramol six years ago on a profitable solar farm in Lop Buri, now a showcase for Thai renewables.

"With this collaboration and support from multi-lateral agencies, we believe that we can deliver an affordable and competitive tariff proposal to Thailand and perhaps ASEAN nations and support Lao in development of its new energy source and enhance its position as 'The Battery of Asia'. Wind power has become a reliable and secure provider of power in countries such as Denmark where it generates more than 40 per cent of the country's electricity consumption. In the United Kingdom, wind powers 10 per cent of its needs. More than 83 countries in the world depend on wind as part of its energy mix. Like hydro, wind has become a mainstream source of power.